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27C0100
Tools  for  Business  Decisions
            Exercises
  kari.silvennoinen@student.hse.fi
Exercise  5
• “Exercise  Set  5”,  due  on  Monday,  March  1st.

• First  quesHon
   – Is  each  facility  built  at  most  once?
   – or  can  they  be  built  mulHple  Hmes?


• Second  case  due  February  25th.

                          kari.silvennoinen@hse.fi      2
Goal  Programming
The  admission  commiQee  for  the  Whartward  
Business  School  will  be  making  its  decisions  
regarding  which  applicants  to  admit  to  its  MBA  
program  for  the  coming  year.  In  addiHon  to  
considering  each  applicant  on  his  or  her  own  merit,  
the  commiQee  needs  to  take  some  policy  guidelines  
into  account.
  
The  three  basic  goals  set  by  the  commiQee  are  as  
follows:
                         kari.silvennoinen@hse.fi                3
Whartward  Business  School
• Goal  1:  The  entering  class  should  include  at  
  least  240  students
• Goal  2:  The  entering  class  should  have  an  
  average  GMAT  total  score  of  at  least  690
• Goal  3:  The  entering  class  should  consist  of  at  
  most  60%  of  men



                        kari.silvennoinen@hse.fi               4
Whartward  Business  School
• Let  di+  be  the  amount  of         Category              Average  GMAT

  posiHve  deviaHon  and  di-­‐         High  men  (HM)       720
                                        High  women  (HW)     720
  the  amount  of  negaHve  
  deviaHon  from  the                   Medium  men  (MM)     670

  targets                               Medium  women  (MW)   670
                                        Low  men  (LM)        620
                                        Low  women  (LW)      620
• Formulate  the  above  
  goal  programming  
  problem  using  the  
  definiHons  above.    

                           kari.silvennoinen@hse.fi                            5
Whartward  Business  School

min W = w1 d− + w2 d− + w3 d+
            1       2       3
s.t.
hm + hw + mm + mw + lm + lw − d+ + d− = 240
                               1    1
720(hm + hw ) + 670(mm + mw ) + 620(lm + lw )
                                              − d+ + d− = 690
       hm + hw + mm + mw + lm + lw               2    2

       hm + mm + lm
                              − d+ + d− = 0, 6
hm + hw + mm + mw + lm + lw      3    3




                     kari.silvennoinen@hse.fi                    6
Nonlinear  Programming
• How  to  model  NLP-­‐problems  in  Excel




                      kari.silvennoinen@hse.fi   7

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Tools for Business Decisions - Exercises 5

  • 1. 27C0100 Tools  for  Business  Decisions Exercises kari.silvennoinen@student.hse.fi
  • 2. Exercise  5 • “Exercise  Set  5”,  due  on  Monday,  March  1st. • First  quesHon – Is  each  facility  built  at  most  once? – or  can  they  be  built  mulHple  Hmes? • Second  case  due  February  25th. kari.silvennoinen@hse.fi 2
  • 3. Goal  Programming The  admission  commiQee  for  the  Whartward   Business  School  will  be  making  its  decisions   regarding  which  applicants  to  admit  to  its  MBA   program  for  the  coming  year.  In  addiHon  to   considering  each  applicant  on  his  or  her  own  merit,   the  commiQee  needs  to  take  some  policy  guidelines   into  account.   The  three  basic  goals  set  by  the  commiQee  are  as   follows: kari.silvennoinen@hse.fi 3
  • 4. Whartward  Business  School • Goal  1:  The  entering  class  should  include  at   least  240  students • Goal  2:  The  entering  class  should  have  an   average  GMAT  total  score  of  at  least  690 • Goal  3:  The  entering  class  should  consist  of  at   most  60%  of  men kari.silvennoinen@hse.fi 4
  • 5. Whartward  Business  School • Let  di+  be  the  amount  of   Category Average  GMAT posiHve  deviaHon  and  di-­‐   High  men  (HM) 720 High  women  (HW) 720 the  amount  of  negaHve   deviaHon  from  the   Medium  men  (MM) 670 targets Medium  women  (MW) 670 Low  men  (LM) 620 Low  women  (LW) 620 • Formulate  the  above   goal  programming   problem  using  the   definiHons  above.     kari.silvennoinen@hse.fi 5
  • 6. Whartward  Business  School min W = w1 d− + w2 d− + w3 d+ 1 2 3 s.t. hm + hw + mm + mw + lm + lw − d+ + d− = 240 1 1 720(hm + hw ) + 670(mm + mw ) + 620(lm + lw ) − d+ + d− = 690 hm + hw + mm + mw + lm + lw 2 2 hm + mm + lm − d+ + d− = 0, 6 hm + hw + mm + mw + lm + lw 3 3 kari.silvennoinen@hse.fi 6
  • 7. Nonlinear  Programming • How  to  model  NLP-­‐problems  in  Excel kari.silvennoinen@hse.fi 7